Supply Chain

When You'd Rather Not Do It Yourself

June 16, 2007

While outsourcing often gets a bad rap in some circles, there are certain types of outsourced services that just about every manufacturer uses these days, with no negative connotationsnamely, third-party logistics, or 3PLs. According to Northeastern University's Robert Lieb, one of the country's (probably the world's) leading experts on 3PLs, manufacturers are increasingly turning to 3PLs for a simple reason: they take away all the hassle of trying to manage a logistics operation yourself. (I interviewed Northeastern University's Robert Lieb a couple years ago, with some of that conversation ending up in the 3PL chapter of my supply chain management book.)

In this day and age of focusing on "core competencies," those companies that don't have world-class logistics groups can nevertheless win in the marketplace by hiring 3PLs to manage a key element of the transportation or distribution process. And research indicates that at least 80% of the companies in North America use a 3PL for at least one key supply chain task.

A study conducted by Northeastern and Accenture indicates that the services most frequently outsourced to a 3PL are:
Direct transportation services (67%)
Customs brokerage (58%)
Freight payment services (54%)
Freight forwarding (46%)
Warehouse management (46%)
Shipment consolidation (42%)

Another research firm, Eyefortransport, recently conducted a popularity contest-type poll trying to determine which 3PLs were deemed the "best" within various industries. Here's the short-list of the winners, along with links to their websites:

Best 3PL for Retail:
APL Logistics
CH Robinson
UTi Worldwide

Best 3PL for Industrial:
Logistics Management Solutions
UPS Supply Chain Solutions
UTi Worldwide

Best 3PL for High-Tech & Electronics:
FedEx Supply Chain Services
Kuehne & Nagel
Panalpina

Best 3PL for Automotive:
Eagle Global Logistics
Penske
Ryder

Best 3PL for Pharmaceuticals, Chemicals and HazMat:
Agility
DHL Exel Supply Chain
Logistics Management Solutions

Best 3PL for Consumer Packaged Goods:
DHL Exel Supply Chain
DSC Logistics
UPS Supply Chain Solutions

Best 3PL for Fresh Food:
AmeriCold Logistics
CH Robinson
Total Transportation Services

About the Author

Dave Blanchard Blog | Senior Editor

Focus: Supply Chain

Email: [email protected]

Follow on Twitter @supplychainDave

Call: 216-931-9794

Contributing Editor Dave Blanchard provides the IndustryWeek audience his expertise in lean supply chain, reporting on topics from logistics, procurement and inventory management to warehousing and distribution. He also specializes in business finance news and analysis, writing on such topics as corporate finance and tax, cost management, governance, risk and compliance, and budgeting and reporting.

Dave is also the chief editor of Penton Media’s Business Finance and editorial director of Material Handling & Logistics.

With over 25 years of experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), and is a frequent speaker at industry events. Dave is an award-winning journalist and has been twice named one of the nation’s top columnists by the American Society of Business Publications Editors.

Dave received his B.A. in English from Northern Illinois University, and was a high school teacher prior to his joining the publishing industry. He is married and has two daughters.